* Offshore holdings of CGBs jump most in over two years to record 1.68 trln yuan
* Including exchange-traded bonds, offshore holdings top 3 trln yuan for first time ever
SHANGHAI, Oct 12 (Reuters) - Offshore holdings of Chinese government bonds (CGBs) rose at the fastest pace in more than two years last month, official data showed, as investors snapped up the instruments ahead of an announcement of their inclusion in a major global index.
Total offshore holdings of CGBs stood at a record 1.68 trillion yuan ($249.90 billion) at the end of September, up 4.81% from a month earlier, according to data released by interbank market clearing house China Central Depository and Clearing Co (CCDC) Saturday evening.
It was the biggest monthly percentage gain in foreign CGB holdings since August 2018.
Offshore holdings of policy bank bonds climbed more than 6% to a record 846 billion yuan.
Foreign holdings of all interbank market bonds cleared through CCDC and the Shanghai Clearing House (SCH) stood at 2.94 trillion yuan, up 4.9% from a month earlier, according Reuters calculations using CCDC and SCH data.
Offshore investors also held 61.94 billion yuan in exchange-traded bonds at the end of September, according to data from the Shanghai Stock Exchange, pushing total foreign holdings of yuan-denominated bonds over 3 trillion yuan for the first time ever.
Index provider FTSE Russell said on Sept. 24 that, pending an affirmation in March, it would add CGBs to its flagship World Government Bond Index (WGBI) over 12 months from October 2021, a move expected to drive significant inflows.
Apart from flows related to index inclusions, foreign investors have been increasingly drawn to yuan-denominated bonds in recent months by high yields and an appreciating yuan.
On Monday, the yield on the benchmark 10-year CGB stood at 3.1951%, compared with the 10-year U.S. Treasury yield of 0.7750%.
The yuan gained 3.91% against the dollar between July and the end of September, its strongest quarterly performance since the global financial crisis in 2008.
On Friday, the yuan posted its strongest daily gain since 2005. ($1 = 6.7227 Chinese yuan) (Reporting by Andrew Galbraith; Editing by Subhranshu Sahu)